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LAND  AND  INDIVIDUALISM. 


A  PLEA  FOR 


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BY 


KEMPER  BOCOCK 


PHILADELPHIA,  PA.  : 

KEIGHTON  PRINTING  HOUSE, 

No.  607  Sansom  Street. 

1S87. 


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UNIVERSITY  OF  ILLINOIS 
LIBRARY 

Class  Book  Volume 


Ja  09-20M 


1 


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LAND  AND  INDIVIDUALISM. 


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UNIVERSITY  OF  ILLINOIS 
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A  PLEA  FOR 


AREA  TAXATION 


BY 


KEMPER  BOCOCK. 


PHILADELPHIA,  PA.  : 

KEIGHTON  PRINTING  HOUSE, 
No.  607  Sansom  Street. 


4M 


Preface. 


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The  system  of  specific  or  area  taxation  of 
land  suggested  in  the  following  pages  was 
proposed  in  a  paper  read  by  the  author  before 
the  Philadelphia  Social  Science  AssQciation  on 
the  1 8th  of  November  last,  and  in  an  argument 
made  by  him  before  a  joint  session  of  the 
House  and  Senate  Committees  on  Constitu¬ 
tional  Reform  during  the  present  session  of 
the  Pennsylvania  Legislature.  The  plan  was 
so  favorably  received  on  both  occasions,  not¬ 
withstanding  defects  in  the  manner  of  presen¬ 
tation,  and  the  inquiries  for  a  further  explanation 
of  it  have  since  been  so  frequent,  as  to  lead  to 
its  publication  in  this  form. 

May  i,  1887. 


IP  24079) 


PLEA  FOR  AREA  TAXATION. 


The  causes  of  industrial  disturbance  and  of  the  recur¬ 
rence  of  labor  agitation  as  a  political  factor,  however  com¬ 
plex,  seem  to  be  in  their  turn  only  effects  of  a  single  pri¬ 
mary  cause  ;  namely,  the  fact  that  the  golden  rule  of  altru¬ 
ism  is  still  far  from  realization  in  either  written  or  unwritten 
constitutions  or  law.  The  perfect  moral  principle,  “what¬ 
soever  ye  would  that  men  should  do  to  you,  do  ye  even  so 
to  them,”  is  the  unwritten  constitution  of  every  free  peo¬ 
ple,  and  is  at  the  foundation  of  every  demand  for  fair  play. 
But  while  no  perfect  social  condition  can  be  attained  with¬ 
out  its  general  acceptance  in  spirit  and  enforcement  in 
letter,  the  men  who  claim  that  their  respective  plans  ot 
social  reform  are  panaceas,  render  a  service  by  pointing 
out  the  institutions  in  which  the  altruistic  principle  is  most 
ignored  in  proportion  to  its  importance.  The  transporta¬ 
tion  question  and  the  land  question  have  been  brought  to 
the  front  by  such  specialists,  and  it  is  hard  to  say  which  of 
the  two  is  more  important  to  the  well-being  of  the  most 
numerous  class  of  citizens,  the  wage  workers  of  every  kind. 

The  National  Congress  has  made  a  beginning  of  solving 
the  question  of  the  distribution  of  man  and  the  transporta¬ 
tion  of  products,  but  it  has  made  no  effort  to  establish  a 
permanent  system  of  land  distribution  or  regulation  in  gen¬ 
eral  ;  nor  have  the  States,  to  which  the  latter  question  more 
especially  pertains,  taken  any  important  steps  towards 
modifying  the  inherited  conditions  of  land  tenure.  The 
right  regulation  of  the  land,  however,  is  obviously  as  im¬ 
portant  as  the  right  regulation  of  railroads.  The  owner¬ 
ship  of  land  is  a  conferred  right,  a  delegation  of  the  right 


6 


of  eminent  domain,  as  truly  as  is  the  right  of  acquiring  a 
railroad  route ;  and  it  is  as  competent  for  law-making  pow¬ 
ers  to  hold  the  individual  owner  to  strict  account,  as  it  is 
for  them  to  teach  corporations  that  they  are  bound  to  re¬ 
spect  the  rights  of  the  public  at  large  in  return  for  the  privi¬ 
lege  of  demanding  that  eminent  domain  be  exercised  in 
their  behalf.  The  neglect  of  either  duty  alike  tends  to  the 
indefinite  growth  of  monopoly,  and  of  the  evils  of  depend¬ 
ence  on  absentee  power ; — the  dependence  of  the  many  on 
the  few  and  the  more  or  less  irresponsible ; — in  a  word, 
such  neglect  tends  to  invite  the  dangerous  evils  of  social¬ 
ism  without  providing  for  its  alleged  attractions.  It  is  not 
to  be  wondered  at,  then,'  that  agitators,  who  paint  these 
attractions,  secure  hearers,  and  the  continual  growth  of  their 
audience  can  only  be  counteracted  by  embodying  the 
claims  of  individualism  in  practical  methods  of  reform. 

Socialism’s  solution  of  the  land  question  is  actual  as  well 
as  theoretical  State  ownership.  Individualism,  on  the  other 
hand,  demands  that  here,  as  elsewhere,  the  State  adhere  to 
the  principle  that  it  should  do  nothing  for  the  individual 
which  he  can  do  for  himself,  but  should  confine  itself  to 
what  Herbert  Spencer  calls  its  “negatively  regulative  func¬ 
tion”  of  insuring  for  the  individual  the  utmost  opportunity 
of  self-culture  in  every  direction,  consistent  with  the  rights 
of  neighboring  individuals. 

As  will  be  seen,  hereafter,  the  sense  of  homestead  owner¬ 
ship  is  of  the  first  importance  to  individualism,  and  for  this 
reason,  the  land  question  cannot  be  permanently  or  wisely 
settled  without  recognizing  private  ownership  as,  not  an 
incident,  but  the  essential  object,  of  any  effort  to  exercise 
the  right  of  eminent  domain  so  as  to  break  up  land  mono¬ 
poly,  and  to  secure  to  the  whole  people  “the  right  to  the 
use  of  the  earth.”  It  should  be  the  purpose  of  land  legis¬ 
lation,  not  only  to  devote  all  land  to  private  ownership, 
except  what  is  needed  for  the  transaction  of  public  busi¬ 
ness  or  the  establishment  of  public  pleasure  grounds, 


7 


also  to  make  every  individual  a  landowner  as  far  as  gov¬ 
ernment  can  make  him  one,  by  giving  him  every  facility 
for  the  acquisition  of  land  at  a  reasonable  cost.  It  is  not 
•easy  to  see  how  any  individualist  can  avoid  the  conclusion 
that  the  land  problem  is  to  be  solved  only  by  perfect  dis¬ 
tribution.  Perfect  distribution  of  course  implies  a  system 
that  will  accommodate  itself  to  these  two  conditions  :  a 
steadily  increasing  population,  and  a  constant  area  of  sur¬ 
face.  In  no  other  way  can  the  advantages  of  a  property 
qualification  for  voting  be  secured  to  a  country  in  which 
universal  suffrage  is  an  established  custom,  from  which  no 
backward  step  can  be  taken. 

Individual  tenure  of  land  would  encourage  good  citizen¬ 
ship  by  its  general  effect  upon  the  moral  and  intellectual 
nature  of  the  citizens  even  if  nothing  were  to  be  said  in  its  be¬ 
half  as  a  powerful  stimulus  to  production  *md  to  improve¬ 
ment.  The  sense  of  ownership  of  land  gives  to  a  man  a 
more  or  less  king-like  feeling,  whether  his  holding  be  large 
or  small,  and  the  encouragement  of  small  holdings  with  a 
view  to  making  self-respect  universal,  so  far  as  land  owner¬ 
ship  can  do  so,  is  of  incalculable  importance  on  this  gen¬ 
eral  principle.  But  the  benefits  of  universal  land  owner¬ 
ship  are  more  readily  appreciated  when  the  factor  of  im¬ 
provement  is  taken  into  account. 

The  productive  capacity  of  the  soil  will  be  better  sus¬ 
tained  by  an  occupant  who  feels  that  he  owns  it,  than  by  a 
tenant  whose  tenure  is  limited,  and  who  will  feel  no  sense 
of  loss  if  he  exhausts  the  fertility  of  the  soil  when  approach¬ 
ing  the  expiration  of  his  lease.  If  he  does  not  yield  to  this 
temptation,  but,  on  the  contrary,  conscientiously  improves 
the  quality  of  the  ground  which  he  cultivates,  there  is  noth¬ 
ing  to  insure  him  against  an  increase  of  the  rent  which  he 
has  to  pay  for  the  use  of  it,  for  his  landlord  can  perhaps 
get  more  from  somebody  else,  and  may  decline  to  renew 
his  lease.  But  when  assured  of  a  life-long  tenure  of  owner¬ 
ship,  unless  he  surrenders  it  of  his  own  free  will,  he  is 


8 


likely  to  be  careful  not  to  exhaust  the  soil ;  rather  to  rein¬ 
force  it  from  time  to  time,  and  to  realize  the  benefits  of  a 
rotation  of  crops.  Experience  will  enable  him  to  under¬ 
stand  what  the  local  soil  most  needs.  To  these  familiar 
considerations  must  be  added  the  fact  that  the  distribution 
of  the  land  into  small  areas  cannot  fail  to  secure  a  better 
average  of  attention  to  cultivation,  because  it  will  tend  to 
make  every  man  concentrate  his  resources.  Instead  of  a 
large  tract  half  cultivated  by  one  man,  there  will  be  two  or 
more  small  tracts,  well  cultivated,  each  by  its  owner.  But 
it  will  be  necessary  not  only  to  cause,  but  to  maintain  this 
system  of  distribution.  It  will  be  seen,  hereafter,  that  the 
present  methods  of  regulating  individual  ownership  tend  to 
an  unequal  distribution,  and  hamper  the  spirit  of  improve¬ 
ment,  as  well  in  its  relations  to  the  soil  as  to  artificial  estab¬ 
lishments  on  thtf  surface.  The  significant  fact  that  the 
question  of  land  monopoly  is  already  becoming  prominent, 
notwithstanding  the  enormous  area  of  the  United  States, 
and  the  fact  that  it  contains  a  square  mile  for  every  ten 
inhabitants,  is  of  itself  an  indication  that  the  present  sys¬ 
tem  of  tenure  is  not  one  of  those  “perfect  laws  which  work 
forever.” 

When  the  question  of  building  comes  up  for  considera¬ 
tion,  the  importance  of  universalizing  homestead  owner¬ 
ship  presents  itself  so  plainly  as  hardly  to  need  extended 
comment.  The  ownership  of  a  home  makes  a  man  a  stock¬ 
holder  in  a  good  order  insurance  company.  He  is  much 
less  apt  to  join  a  riotous  mob  if  he  has  a  house  which  may 
be  burned  or  battered  in  a  possible  riot.  He  is  much  more 
likely  to  study  live  political  questions,  and  to  vote  intelli¬ 
gently,  if  the  men  who  are  to  govern  the  community  in 
which  he  lives  have  the  power  to  put  good  or  bad  streets  or 
roads  in  front  of  his  property,  and  increase  its  burden  of 
taxation,  or  incur  a  debt  to  avoid  such  an  increase.  He  is 
much  more  likely  to  establish  a  family,  and  to  cultivate  his 
moral  nature ;  to  love  peace  with  his  neighbor,  and  to  pre- 


9 


fer  arbitration  to  violence,  if  he  owns  the  house  in  which 
he  lives,  and  has  a  settled  feeling,  which  would  be  disturbed 
by  bitter  disputes,  the  difficulty  of  realizing  what  he  had 
spent,  and  the  very  idea  of  “pulling  up  stakes”  and  mov¬ 
ing  away.  In  short,  every  possible  motive  to  improvement 
interests  the  man  who  owns  his  home,  and  most  of  these 
motives  are  lacking  to  the  tenant.  They  would  still  be 
lacking,  if  the  government,  not  an  individual,  were  his  land¬ 
lord.  The  difference  in  quality  between  a  house  built  for 
the  builder  to  live  in,  and  a  house  built  to  sell,  is  prover¬ 
bial.  It  should  be  made  as  easy  to  own  a  home  as  to  be  a 
tenant.  It  should  be  as  easy  to  acquire  a  small  farm  as  to 
buy  its  products  in  a  city  market  by  the  payment  of  a  reas¬ 
onable  price.  The  right  to  the  use  of  the  earth  is  a  neces¬ 
sary  of  life,  and  it  is  high  time  that  our  civilization  were 
devising  a  method  of  enforcing  this  right.  It  is  like,  and 
at  the  same  time  unlike,  all  other  rights.  It  is  like 
them,  in  that  every  right  must  be  exercised  so  as  not  to 
interfere  with  the  rights  of  others.  It  cannot  be  a  right 
unless  it  is  so  exercised.  It  is  unlike  others  in  that  this  alone, 
of  all  the  rights  of  possession,  has  to  do  with  something  that 
is  limited  in  amount,  something  of  which  he  who  holds 
more  than  his  share  robs  another.  To  enforce  such  a  right 
is  a  necessity  that,  by  its  very  nature,  justifies  rigid  legal 
assertion  of  the  supremacy  of  the  people — the  right  of  emi¬ 
nent  domain.  A  system  of  land  law  that  promotes  distribu¬ 
tion,  without  appearing  to  force  it,  and  that  keeps  the  land 
distributed  abreast  of  the  distribution  of  families,  is  de¬ 
manded  by  the  existence  of  grave  evils.  Its  realization 
would  do  much  to  remove  other  grave  evils  that  can  only 
disappear  before  that  general  spirit  of  intelligent  abtruism 
which  universal  home  ownership  would  do  so  much  to  pro¬ 
mote. 

Paradoxical  as  it  may  seem,  a  rigid  regulation  of  land 
tenure,  with  a  view  to  the  utmost  distribution,  is  implied  by 
the  freedom  of  our  institutions.  The  familiar  anti-sumptu. 


ary  principle  is  that  the  government  does  wrong  to  inter¬ 
fere  with  the  consumption  of  the  products  of  industry  by 
the  citizen.  It  has  no  right  to  so  interfere,  because  the 
citizen  has  the  right  to  live  as  he  chooses,  and  to  consume 
what  he  chooses,  so  long  as  he  does  not  interfere  with 
others.  But  when  he  locks  up  land — a  limited  and  neces¬ 
sary  something — he  does  interfere  with  the  means  of  sub¬ 
sistence  of  others,  and  it  is  the  duty  of  the  government  to 
see  that  he  does  not  do  that  which  it  cannot  itself  do. 
Otherwise,  a  small  part  would  be  greater  than  the  whole.  If 
the  government  cannot  deprive  the  individual  of  luxuries, 
the  individual  surely  cannot  deprive  another  individual  of 
necessities,  or  of  the  means  of  securing  them.  It  is  the 
best  policy  for  a  government  based  upon  universal  suffrage 
to  do  that  which  it  is  the  general  duty  of  every  govern¬ 
ment  to  do  ;  to  insure  its  citizens  the  utmost  freedom  of 
opportunity  for  earning  the  means  of  subsistence,  in  a  way 
consistent  with  their  highest  intellectual  and  moral  culture. 

The  highest  intellectual  and  moral  culture,  however,  can¬ 
not  be  expected  under  a  paternal  policy  of  extending  indefi¬ 
nitely  the  machinery  of  government,  and  increasing  the 
number  of  places  to  which  the  office  seeker  may  aspire. 
The  demoralizing  effects  of  State  socialism  maybe  reasona¬ 
bly  imagined,  but  they  cannot  be  appreciated  until  real¬ 
ized  with  all  their  incidental  evils.  To  multiply  the  num¬ 
ber  of  official  places  so  largely  as  is  contemplated  by  the 
need  of  finding  ways  to  spend  the  surplus  revenue  proba¬ 
ble  under  a  realization  of  all  of  Henry  George’s  ideas, 
would  be  to  make  the  public  service  the  chief  ambition  of 
every  easy-going  young  man  who  wanted  to  make  a  living 
with  as  little  trouble  or  preparation  as  possible.  The  spoils 
system,  with  its  implied  doctrine  that  public  office  is  to  be 
sought  for  all  that  could  be  made  out  of  it,  would  become 
the  law  of  the  land,  and  our  national,  because  our  indi¬ 
vidual,  degradation  would  follow.  The  habit  of  depend¬ 
ing  upon  the  government  for  everything  would  grow  upon 


those  who  were  naturally  capable  of  bold  enterprises,  and 
this  tendency,  too,  would  exert  an  injurious  effect  upon 
character.  Then,  with  corrupting  influences  at  work  in 
the  sphere  of  administration,  it  would  not  be  surprising  if 
justice  became  more  and  more  inaccessible  to  the  poor, 
until  at  last  supine  acquiescence  in  the  will  of  the  stronger 
man  became  the  rule,  to  which  the  only  exception  should 
be  resistance  by  violence.  Surely,  socialism  would  make 
the  rich  richer,  and  the  poor  poorer  in  everything  that  is 
worth  having  beyond  the  mere  conditions  of  animal  exist¬ 
ence,  and  restore  the  old  unwritten  law  that  might  makes 
right. 

The  more  perfect  distribution  of  land,  then,  is  the  more 
natural  choice,  between  socialism  that  would  impair  the 
individual  and  the  productive  capacity  of  the  land,  and 
individualism  that  would  indefinitely  improve  the  land, 
while  the  land,  in  its  turn,  would  indefinitely  improve  the 
individual.  Let  land  be  divided  among  as  many  individ¬ 
uals  as  possible. 

THE  METHOIT  OF  DISTRIBUTION. 

Shall  the  better  distribution  of  land  be  brought  about 
forcibly,  or  shall  the  land  be  encouraged  to  distribute  itself 
spontaneously?  Very  little  argument  in  favor  of  the  lat¬ 
ter  method  is  needed,  except  in  proof  of  its  practicability. 
There  are  numerous  objections  to  wholesale  confiscation 
and  re-distribution.  An  enormous  increase  in  governmental 
machinery  would  be  needed,  and  every  student  of  civil  ser¬ 
vice  questions  knows  how  hard  it  is  to  keep  offices  created 
for  temporary  purposes  from  becoming  permanent  barna¬ 
cles. 

In  economics,  as  in  physical  science,  the  best  progress  is 
made  by  following  the  line  of  least  resistance  or  friction. 
An  immense  reserve  of  money  would  be  required  to  enable 
the  government  of  a  State  or  a  county  to  buy  everybody’s 
land  in  order  to  resell  it  ;  the  awarding  of  fair  compensa- 


tion  would  be  a  herculean  job  in  more  senses  than  one,  and 
more  or  less  corruption  would  result  long  before  the  gov¬ 
ernment  had  gotten  possession  of  all  the  land.  When  the 
actual  work  of  re-distribution  began,  there  would  be  a  seri¬ 
ous  dilemma.  If  a  government  were  able  to  give  away  the 
land  in  its  jurisdiction,  the  next  generation  would  think  it 
unfair  that  the  sons  had  to  buy  land  which  was  given  to  the 
fathers  ,  for  accumulation  and  unequal  distribution  would 
go  on  as  before  if  the  ordinary  laws  of  land  tenure  con¬ 
tinued  in  force.  The  sons  of  accumulating  fathers  would 
inherit,  and  the  sons  of  other  fathers  would  have  to  buy. 
What  would  be  more  natural  than  that  another  process  of 
wholesale  purchase  and  re-donation  would  be  demanded, 
and  how  hard  would  it  be  to  resist  it  !  Such  a  method  of 
re-distribution  is  plainly  inadequate.  It  would  discourage 
the  spirit  of  improvement  that  is  born  of  the  sense  of  per¬ 
manent  tenure  and  would  involve  the  increase  of  govern¬ 
mental  machinery  at  frequent  intervals.  It  is  open,  although 
in  a  less  degree,  to  the  objections  that  lie  against  actual 
State  ownership  and  universal  tenantship. 

It  would  be  far  wiser  to  put  distributing  forces  in  opera¬ 
tion  in  the  ordinary,  rather  than  in  extraordinary  regula¬ 
tions  of  land  tenure  ;  to  adjust  the  land  laws  so  that  the 
unwritten  law  of  supply  and  demand  could  have  a  chance 
to  operate  instead  ot  being  blocked  more  and  more  as  a 
community  increases  in  material  progress ;  to  make  use  of 
existing  institutions  with  which  the  public  is  familiar,  and 
which  it  takes  as  matters  of  course,  and  to  apply  legal 
machinery  only  under  circumstances  which  suggest  its  use, 
instead  of  introducing  it  arbitrarily. 

Just  such  circumstances  are  found  in  the  institution  of 
taxation,  and  in  the  temporary  assumption  of  qualified  gov¬ 
ernmental  control  on  the  death  of  a  person  leaving  an 
estate.  If  the  opportunities  offered  by  these  familiar  facts 
suffice  for  making  effective  such  measures  as  are  intended 
to  promote  the  utmost  necessary  distribution  of  land,  their 


!3 


effectiveness  will  be  impaired  rather  than  increased  by  going 
further  and  arousing  needless  opposition 

It  may  be  inferred,  then,  that  the  desideratum  is  a  method 
of  taxation  that  will  make  land  distribute  itself  in  response 
to  the  continually  increasing  demand  therefor  ;  supplemented 
with  such  legislation  regarding  the  settlement  of  estates  as 
will  aid  in  this  process  of  distribution.  For  example,  it 
might  be  made  unlawful  for  an  heir  to  inherit  more  than  a 
certain  area  of  land  in  any  county  in  which  he  does  not 
actually  reside,  the  excess  to  be  sold  by  the  sheriff,  and  the 
proceeds,  less  costs,  turned  into  the  estate  in  cash.  Such  a 
provision  would  induce  many  men  to  settle  their  own 
estates  by  selling  off  land  as  they  had  opportunity  and  in¬ 
vesting  the  money  otherwise.  Indeed,  rich  men  would  be 
less  disposed  to  accumulate  real  estate,  and  thus  the  mono¬ 
poly  demand  for  land  would  be  reduced,  and  improvement 
promoted  by  the  capital  thus  directed  into  channels  of 
greater  activity. 

So  much  for  occasions  of  extraordinary  governmental 
interference.  The  ordinary  occasion — that  of  taxation — 
demands  a  more  extended  discussion. 

DISTRIBUTION  BY  TAXATION. 

The  object  of  taxation  is,  primarily,  the  accumulation  of 
the  money  needed  to  pay  the  necessary  cost  of  government. 
Taxation  of  some  kind  is  a  necessity,  if  there  is  to  be  any 
government;  and  this  institution,  therefore,  offers  one  of  the 
easiest  methods  of  accomplishing  a  given  legitimate  pur¬ 
pose,  when  it  is  desirable  to  work  by  indirect  methods, 
rather  than  to  provoke  resistance  by  direct  interference  of 
a  more  or  less  arbitrary  aspect.  Laws  which  compel  the 
citizen  to  do  his  share  in  a  great  altruistic  scheme  for  giv¬ 
ing  his  neighbor  an  equal  opportunity  to  that  which  he 
enjoys  are  more  readily  acquiesced  in  if  their  operation  is 
indirect  enough  not  to  be  felt.  The  abuse  of  indirect  taxa- 


1 4 


tion  is  no  argument  against  its  legitimate  use,  and  the 
spirit  of  individualism  is  promoted  by  reminding  the  indi¬ 
vidual  as  seldom  as  possible  that  he  is  governed.  There  is, 
therefore,  a  legitimate  secondary  use  of  taxation  as  a  means 
to  a  worthy  end.  Wisely  applied  taxation  can  be  used,  as 
in  the  levying  of  protective  duties  on  imports,  for  the  asser¬ 
tion  of  that  individualism  which  is  as  important  to  the 
nation,  or  the  social  unit,  as  a  factor  in  human  progress,  as 
it  is  to  the  personal  unit. 

Land  taxation  in  particular,  for  ulterior  purposes,  should 
commend  itself  even  to  the  most  extreme  members  of  the 
laissez  faire  school,  on  account  of  the  fact,  which  cannot 
be  ignored  for  a  moment  in  any  fair  discussion  of  the  land 
question,  that  land  is  constant  while  the  population  that 
must  live  on  it  tends  to  increase  continually.  If  it  were 
susceptible  of  proof  that  taxation  should  not  be  ordinarily 
employed  for  any  other  purpose  whatsoever  than  the  rais¬ 
ing  of  revenue,  it  would  still  be  legitimate  to  apply  it  to 
the  land  in  such  a  way  as  to  break  up  monopoly.  For  no 
other  object  of  taxation,  from  its  very  nature  and  conditions , 
is  so  admirably  adapted  for  the  restriction  of  taxation  to  11  the 
actual  needs  of  the  govermnent,  honestly  administered,  ’  ’  as 
one  which  is  constant  in  quantity  while  the  co?mnunity  that 
taxes  it  is  growing  continually . 

For  the  same  reason,  it  is  of  the  utmost  importance  to  the 
success  of  the  “negatively  regulative  principle”  that  land 
distribution  should  be  strictly  regulated  ;  for  without  its 
perfect  distribution,  the  individual  is  deprived  of  the  oppor¬ 
tunity  to  do  everything  for  himself.  He  who  resists  the 
distribution  of  land  when  it  is  attempted  by  just  methods  is 
an  enemy  of  society.  The  land  miser  is  much  worse  than 
the  currency  miser,  for  there  is  more  currency  where  the 
latter  miser’s  commodity  came  from.  But  he  who  locks  up 
land  against  improvement  reduces  the  actual  supply.  Thus 
he  wrongs  the  present  generation.  He  prevents  the  improve¬ 
ment  needed  to  enable  the  soil  to  support  an  increasing 


\ 


l5 


population  in  future.  Thus  he  wrongs  future  generations. 
He  should  be  taxed  out  of  existence. 

In  order  to  be  permanently  useful,  then,  land  taxation 
should  meet  these  two  demands  : 

(1)  It  should  promote,  rather  than  retard,  distribution. 

(2)  It  should  promote,  rather  than  retard,  improve¬ 
ment. 

To  these  requisites  must  be  added  a  third,  which  applies 
to  all  taxation  whatsoever  : 

(3)  It  should  be  impartial  in  its  operation. 

Adhering  as  closely  as  possible  to  the  principle  that  exist¬ 
ing  institutions,  particular  as  well  as  general,  are  to  be  util¬ 
ized  as  the  surest  channels  to  immediate  and  permanent 
progress,  it  is  important  to  inquire  how  far  the  present 
method  of  land  taxation  complies  with  the  above  require¬ 
ments.  The  present  method  embodies  the  principle  known 
in  custom  houses  as  that  of  ad  valorem  taxation. 

First,  does  ad  valorem  taxation  of  land  promote  distribu 
tion  ? 

A  tax  will  operate  in  favor  of  customs  and  devices  by 
which  it  can  be  evaded.  This  is  human  nature  and  is  not 
altogether  wrong.  A  tax  is,  in  general,  the  confiscation  of 
a  portion  of  man’s  income,  presumably  the  result  of  his 
labor,  and  which  he  has  earned  the  right  to  dispose  of. 
Now  it  is  a  familiar  fact  that  a  farm  of  500  acres  is  liable  to 
be  assessed  at  less  than  five  times  the  valuation  placed  by 
assessors  upon  a  similarly  located  farm  of  100  acres.  Our 
present  system  of  taxation — indeed  our  whole  system  of 
land  traffic — deals  with  land  as  if  it  were  a  commodity  that 
could  be  reproduced  indefinitely,  and  of  which  the  pro¬ 
duction  could  be  encouraged  by  making  the  wholesale 
price  per  acre  smaller  than  the  retail.  There  is  reason  in 
the  difference  between  the  wholesale  and  retail  prices  of 
articles  which  can  be  replaced  when  consumed.  The 
process  of  replacing  them  gives  employment  to  labor,  and 
the  money  spent  for  labor  and  material  goes  into  circula- 


tion  all  the  sooner  for  the  necessity  of  replacing  them.  But 
when  land  is  taken  out  of  the  market  you  cannot  employ 
labor  to  make  more  land.  It  is  not  so  reasonable,  then, 
to  discriminate  in  favor  of  the  man  who  has  a  large  tract 
of  land,  and  to  make  his  taxes  lighter  to  the  acre  than  those 
of  a  small  holder  are  likely  to  be.  Yet  there  is  a  continual 
temptation  to  this.  It  is  not  so  easy  for  the  assessor  to  ex¬ 
plore  a  large  holding  as  it  is  to  examine  a  small  one,  so  he 
looks  at  the  buildings,  takes  the  average  value  of  the  land 
for  granted,  and  naturally  gives  the  owner,  rather  than  the 
community,  the  benefit  of  whatever  doubt  there  is. 

It  would  seem,  then,  that  so  far  as  the  ad  valorem  tax¬ 
ation  of  land  affects  its  distribution  at  all,  it  tends  to  retard 
it.  It  certainly  does  not  promote  it,  but  rather  encourages 
the  accumulation  of  idle  land  for  speculative  purposes.  But 
it  is  impossible  to  weigh  the  real  merits  of  the  value  method 
of  taxation  of  land  without  considering  the  effects  of  im¬ 
provement,  which,  under  normal  conditions,  is  responsible 
for  whatever  differences  in  value  may  exist.  We  therefore 
pass  on  to  the  second  question  and  call  attention  to  it  as  of 
the  utmost  importance. 

Does  value  taxation  promote  improvement  or  retard 
it? 

We  are  confronted  at  the  outset  by  the  obvious  fact 
that  improvement,  from  the  very  nature  of  the  case,  in¬ 
creases  value,  and  therefore  creates  a  liability  to  increased 
taxation.  It  now  becomes  clearer  why  the  farm  of  ioo 
acres  bears  more  than  one-fifth  of  the  burden  imposed  on 
the  farm  of  500  acres.  It  is  because  all  kinds  of  improve¬ 
ments  are  taxed.  One  is  tempted  to  wonder  how  such  an 
absurd  basis  of  taxation  could  ever  have  been  adopted  until 
we  remember  that  every  such  system  is  a  gradual  growth 
from  inadequate  beginnings.  To  deny  that  an  ad  valorem 
tax  is  a  tax  on  improvement  is  as  useless  as  it  would  be  to 
deny  that  two  and  two  are  four.  So  plain  a  truth  cannot 
be  denied,  and  does  not  need  to  be  asserted.  It  asserts. 


*7 


itself,  and  its  absurdity  also  asserts  itself,  when  it  is  seen 
from  any  point  of  view  except  that  from  which  we  are  com¬ 
pelled  to  recognize  the  improvement  tax  as  an  existing 
institution. 

Henry  George,  in  “Progress and  Poverty,”  points  out 
this  absurdity,  and  proceeds  to  demand  the  abolition  of 
the  lesser  part  of  it  in  importance,  the  tax  on  buildings.  Mr. 
George  would  concentrate  all  taxation  on  land  itself ;  and 
so  far  he  seems  to  us  to  be  right.  All  taxation  on  real  es¬ 
tate  should  be  put  on  the  land  itself.  A  town  that  wishes 
to  induce  a  factory  to  locate  within  its  limits  exempts  it 
from  taxation  for  a  term  of  years,  and  the  factory  comes. 
This  species  of  exemption  should  become  perpetual  and 
universal,  if  possible.  A  man  should  not  be  fined  for  build¬ 
ing  a  handsome  house,  by  being  compelled  to  pay  a  big 
tax  on  it,  while  his  next  door  neighbor,  occupying  a  lot  of 
perhaps  the  same  size,  with  a  squatty,  ugly  little  house  that 
is  an  eyesore  to  the  neighborhood,  is  taxed  lightly. 

But  carry  out  to  its  logical  conclusion  the  excellent 
point,  made  by  Mr.  George  that  a  tax  on  improvements  is 
a  tax  on  improvement — any  of  us  can  make  this  egg  stand 
on  its  end  after  Columbus  has  done  it — and  what  are  we 
compelled  to  infer  ? 

The  ad  valorem  tax  is  a  tax  on  the  improvement ,  and  a 
hindrance  to  the  productive  capacity ,  of  the  land  itself. 

Fertilize  a  farm  and  increase  the  average  yield  to  the 
acre,  and  its  value  is  increased,  even  if  you  have  made  no 
additions  to  the  buildings  since  the  last  valuation  was  made. 
If  valuation  were' only  a  question  of  buildings — important 
as  it  is  to  repeal  the  tax  on  building  improvements — the 
land  question  would  not  to  day  be  a  topic  of  widespread 
discussion  involving  the  rights  of  man  and  the  future  sub- 
sistance  of  the  race.  Land  without  buildings  would  be 
easy  to  get.  But  there  is  improved  land  in  the  suburbs  of 
every  town  or  city  which  it  is  next  to  impossible  to  get 
without  paying  an  exorbitant '  price.  Henry  George  wants 


i8 


to  tax  the  “unearned  increment,”  the  increase  in  value  re¬ 
sulting  from  the  growth  of  the  community  close  by.  But 
the  present  ad  valorem  tax  taxes  the  earned  increment. 
The  farmer  who  takes  up  some  wild  land,  clears  it,  ferti¬ 
lizes  it,  and  makes  it  worth  something,  is  taxed  or  fined  for 
doing  so.  In  one  respect,  at  least,  we  have  already  carried 
out  the  socialist  doctrine.  The  farmer  is  only  a  tenant,  the 
government  is  his  landlord  ;  the  tax  is  his  rent,  and  when 
the  tenant  makes  improvements  the  landlord,  forsooth, 
raises  the  rent. 

That  Henry  George  has  missed  the  better  half  of  the 
improvement  taxation  problem  is  clearer  when  we  take  in- 
into  account  future  considerations.  Cities  are  continually 
reducing  the  total  area  of  land  available  for  agricultural 
purposes.  True,  there  is  an  enormous  area  on  every  con¬ 
tinent,  not  yet  opened  up,  and  the  growth  of  cities  is  ac¬ 
companied  now  and  then  by  a  reaction  in  favor  of  the  de¬ 
velopment  of  virgin  agricultural  lands  to  supply  the  in¬ 
creased  markets  ;  but  nevertheless,  in  the  long  run,  the 
demand  for  land  for  residence  and  business  purposes  in¬ 
creases  all  the  time.  This  demand  is  supplied  at  the  ex¬ 
pense  of  the  total  demand  for  land  for  producing  purposes. 
So  far  as  either  category  suffers,  it  is  the  productive  total. 
Meantime,  population  is  increasing.  The  supply  of 
building  sites  for  this  increasing  population  is  as  large  as 
need  be.  But  the  supply  of  land  that  is  to  produce  the 
food  to  feed  them,  and  the  raw  material  which  they  are  to 
handle  and  work  up  and  buy  and  sell,  is  more  limited.  It 
is,  then,  even  more  important  that  all  hindrance  to  im¬ 
provement,  in  the  sense  of  a  continual  increase  of  produc, 
tive  capacity,  be  removed,  than  it  is  that  the  taxation 
buildings  be  abolished  for  the  sake  of  placing  all  real 
estate  taxation  on  the  ground  itself. 

The  third  test  to  be  applied  to  the  value  taxation 
method  is  the  question  whether  it  is  impartial. 

We  have  already  seen  that  it  is  not,  in  that  it  pun- 


l9 


ishes  the  enterprising  citizen  who  makes  handsome  im¬ 
provements,  and  puts  a  premium  on  non-improvement, 
which  encourages  that  contemptible  being,  the  land  miser. 
This  is  unjust.  But  it  is  also  unjust  through  the  imperfect 
distribution  which  it  makes  continually  more  imperfect.  It 
is  continually  growing  harder  to  get  land  under  this  lock¬ 
ing-up  system.  The  result  is  that  the  tenants  increase  fas¬ 
ter  than  the  landlords,  and  the  latter,  being  masters  of  the 
situation,  impose  the  taxes  on  the  former,  by  increasing 
the  rent.  The  system  is  hardest  of  all  on  the  tenant  of 
the  small  house.  Houses  of  four  rooms  pay  ten  and  twelve 
per  cent,  on  the  investment  because  the  workingman  is 
obliged  to  be  a  tenant,  since  he  finds  it  so  hard  to  own  a 
homestead.  Perfect  distribution  would  go  far  to  remedy 
this.  The  workingman  would  find  it  easier  to  own  his 
house  if  he  chose  to  do  so,  and  the  proportion  of  tenants 
to  owners  would  fall  off.  The  taxes  would  equalize  them¬ 
selves  with  improved  distribution,  while  the  ad  valorem 
method  of  taxation,  with  its  adverse  effect  on  distribution — 
partly  a  direct  effect  and  partly  indirect,  through  its  adverse 
effect  on  improvement,  with  which  distribution  is  so  closely 
associated — imposes  the  burdens  of  taxation  more  une¬ 
qually  as  civilization  progresses. 

To  recapitulate,  we  have  been  led  to  the  conclusion 
that  the  evils  arising  from  the  imperfect  distribution  of  land 
are  intensified  by  changes  in  the  direction  of  socialism,  and 
that  they  can  be  remedied  by  reforms  calculated  to  promote 
individualism;  that  the  most  perfect  distribution  of  land 
would  be  that  which  made  it  as  easy  as  possible  for  every 
individual  to  acquire  land ;  that  such  a  reform  should  be 
accomplished  by  ordinary  and  accepted,  rather  than  ex¬ 
traordinary  and  radical  methods  of  administration  ,  that 
taxation  and  the  regulation  of  decedents’  estates  are  the 
channels  through  which  the  desired  end  can  be  attained 
with  the  least  resistance  ;  and  finally,  that  the  ad  valorem 
method  of  taxation  is  a  hindrance  to  distribution  and  im- 


20 


provement,  and  tends  to  promote  the  evils  of  landlordism, 
and  the  idleness  of  the  soil  for  the  speculative  .  purposes  of 
its  owners.  We  find  that  the  taxation  of  improvements 
whether  in  buildings  or  in  the  quality  of  the  soil,  is  insep¬ 
arable  from  the  taxation  of  real  property  on  a  basis  of  mere 
value,  and  that  all  such  taxation  tends  to  discourage  the 
spirit  of  enterprise  which  should  be  exerted  upon  the 
soil  to  make  it  meet  the  increasing  demands  that  will  be 
made  upon  it  in  the  future,  with  the  growth  of  population. 

Taxation  of  every  kind  is  included  in  one  or  the  other 
of  two  classes  :  ad  valorem  taxes  and  specific  taxes.  These 
two  expressions  are  chiefly  used  with  reference  to  import 
duties,  the  ad  valorem  duty  on  wool  for  instance,  having 
been  at  our  time  five  per  cent.,  and  the  specific  duty  sub¬ 
sequently  twelve  cents  a  pound 

IVe  propose  that  specific  taxation  be  substituted  for  the 
ad  valore?n  taxation  of  land ,  by  applying  to  each  unit  of  mea- 
sure?ne?it  (an  acre ,  or  a  square  foot )  a  tax  rate  of  a  definite 
sum  of  money. 

It  should  be  understood  at  once  that  a  specific  tax  on 
land,  which  must  of  necessity  be  a  tax  according  to  area 
or  linear  measurement,  does  not  mean  the  same  tax  rate  on 
one  acre  as  on  another  acre  differently  situated,  any  more 
than  to  make  all  tariff  duties  specific  would  mean  the  same 
duty  on  a  pound  of  wool  as  on  a  pound  of  sugar,  or  the 
measurement  of  every  imported  article  by  the  pound  in¬ 
stead  of  by  some  other  unit  of  measurement  more  appropri¬ 
ate  to  the  circumstances  of  the  case.  It  would  be  just  as 
easy  to  classify  land  as  any  other  series  of  taxable  articles. 

There  can  be  no  perfect  substitute  for  the  ad  valorem 
method  of  taxing  land,  which  is  not  free  from  the  objec¬ 
tions  which  we  have  found  to  lie  against  this  method.  In 
other  words  the  area  tax  plan,  or  any  other  plan  which  is 
intended  to  replace  the  value  tax  plan,  must  comply  with 
these  requirements  : 

i.  It  must  promote  the  distribution  of  land. 


2.  It  must  promote  the  improvement  of  land,  in  every 
sense  of  that  word,  and  under  all  circumstances. 

3.  It  must  be  equitable. 

While  there  can  be  no  tax  on  the  value  principle  that 
is  not  a  tax  on  improvement,  which  is,  by  its  very  nature, 
progressive  value,  yet  there  is  value  residing  in  real  pro¬ 
perty,  which  does  not  depend  on  actual  improvement,  but 
on  possible  improvement.  This,  the  germ  of  right  inher¬ 
ent  in  ad  valorem  taxation,  is  the  right,  because  of  the  ne¬ 
cessity,  to  tax  that  part  of  value  which  arises  from  location, 
and  which  makes  neceessary  some  arrangement  for  the 
classification  of  land  for  the  purposes  of  taxation.  It  is 
clear  enough  that  an  acre  of  land  which  is  favorably  lo¬ 
cated  for  purposes  of  improvement  ought  to  bear  a  much 
higher  tax  than  an  acre  the  location  of  which  suggests  no 
improvement  at  all.  A  scheme  of  taxation  avowedly  for 
the  purpose  of  promoting  improvement  must  necessarily 
take  into  account  the  circumstances  which  make  the  ques¬ 
tion  of  improvement  one  of  importance  to  the  community. 
If  we  propose  to  tax  an  unimproved  town  lot  as  much  as  we 
tax  the  improved  lot  of  the  same  area  adjacent  to  it,  then 
it  will  be  necessary  to  tax  it  at  a  specific  rate  which,  applied 
to  a  less  favorably  located  lot,  would  be  actually  prohibi¬ 
tory  of  improvement ;  for,  in  the  latter  case  no  possible 
form  of  improvement  would,  under  the  prevailing  circum¬ 
stances,  enable  the  owner  even  to  reimburse  himself  for  the 
tax,  much  less  to  make  a  profit  or  a  living  out  of  the  busi¬ 
ness.  Obviously  there  is  value,  in  the  one  case,  which  it  is 
just  and  necessary  to  tax  and  which  is  absent  in  the  other 
case  and  should  therefore  not  be  taxed.  This  is  included 
in  that  p  rt  of  the  value  of  land  which  is  called  by  political 
economists  the  “unearned  increment.”  The  object  of  its 
taxation  is,  not  to  punish  the  owner  of  the  land  for  having 
the  foresight  to  buy  that  land  when  it  was  cheap  and  hold 
for  a  rise,  but  to  promote  its  improvement.  We  are  im¬ 
pelled  irresistibly  to  the  following  conclusion  : 


22 


So  far  as  it  is  advisable  to  tax  the  “unearned  increment" 
the  tax  thereon  should  be  so  imposed  as  to  promote  improve¬ 
ment ,  and  it  it  is  therefore  absurd  to  tax  it  according  to  any 
principle  of  taxation  the  effect  of  which  is,  in  general ,  to 
check  improvement. 

Let  us  now  see  how  far  the  principle  of  specific  taxa¬ 
tion  will  meet  our  demands. 

First,  it  must  promote  distribution.  There  is  no  possi¬ 
ble  way  of  taxing  land  which  would  bring  its  holder  so  di¬ 
rectly  and  squarely  face  to  face  with  the  fact  that  he  is  ap¬ 
propriating  more  than  his  share  of  the  earth’s  surface,  as 
taxation- according  to  the  area  he  appropriates.  Its  natural 
effect  upon  him  would  be  to  reduce  the  area  monopolized 
by  him  to  that  which  he  could  actually  use  to  the  best  ad¬ 
vantage.  So  far  as  any  part  of  his  land  was  worthless  to 
him  for  present  purposes,  so  far  would  he  be  willing  to  part 
with  it  for  a  fair  consideration.  It  is  plain  that  a  perman¬ 
ent  principle  of  area  taxation,  if  found  practicable,  would 
promote  distribution,  and  continue  to  promote  it.  A  large 
tract  of  land,  so  rich  in  valuable  minerals  that  its  owners 
could  afford  to  pay  specific  taxes  on  it,  would  be  distributed 
and  become  available  for  agricultural  purposes  when  the 
mineral  resources  are  exhausted. 

Again,  area  taxation  would  promote  improvement. 

This  is  the  keynote  of  the  campaign  for  area  taxation, 
whether  taken  with  reference  to  mineral  land,  farm  land,  or 
land  in  a  growing  community,  desirable  for  building  pur¬ 
poses,  and  possessed  of  an  encouraging  “unearned  incre¬ 
ment.” 

Producers  of  mineral  raw  material  would  not  under 
specific  taxes  lock  up  thousands  of  acres  for  future  use  so  as 
to  restrict  production  and  control  the  market.  They  would 
more  generally  operate  under  leases  from  individual  hold¬ 
ers,  and  would  buy  only  such  land  as  they  could  afford  to 
pay  the  area  tax  on.  There  would  thus  be  less  monopoly 


23 


and  more  competition  in  the  production  of  raw  material 
of  a  mineral  c  haracter,  like  coal  or  iron  ore. 

Farmers  would  take  the  advice  which  agricultural 
journals  and  conventions  have  been  giving  them  for  years, 
and  reduce  their  farms  to  the  area  which  they  could  man¬ 
age  most  profitably.  All  the  land  that  anybody  really 
wanted  would  come  into  the  market,  within  a  convenient 
distance  from  the  markets  for  farm  products;  for  in  thickly 
populated  districts,  from  the  nature  of  the  case  and  the 
volume  of  public  business  to  be  transacted,  the  expenses  of 
local  government  would  be  greater  and  tax  rates  higher  and 
more  prohibitory  of  monopoly  than  in  sparsely  settled  reg¬ 
ions. 

We  have  stipulated,  however,  that  the  ideal  principle 
of  land  taxation  must  promote  improvement  under  all  cir¬ 
cumstances,  and  as  soon  as  we  come  to  consider  the  com¬ 
parative  workings  of  the  specific  principle  upon  developed 
and  undeveloped  land  respectively,  we  are  obliged  to  en¬ 
tertain  the  important  subject  of  classification.  For  develop¬ 
ed  or  improved  land  must  be  classed,  not  with  improved 
land  of  some  other  class,  but  with  unimproved  land  which 
would  be  brought  by  improvement  to  resemble  it,  so  that 
the  aim  of  taxation  may  be  to  secure  that  kind  of  improve¬ 
ment  for  which  the  unimproved  land  to  be  taxed  is  best 
adapted.  It  is  now  easier  to  see  the  unreasonableness  of 
loosely  classifying  land  as  land  improved  and  unimproved, 
cultivated  and  uncultivated.  It  is  not  easy  to  escape  this 
conclusion  : 

The  nature  of  the  community  i?i  which  the  taxable  land 
is  situated  is  the  proper  basis  of  classification  for  purposes  of 
taxation ,  and  not  the  degree  of  improvement  that  has  been 
attained.  The  community  itself  has  no  right  to  tax  the 
value  that  its  growth  does  not  produce,  and  the  nature  of 
the  community  registers  this  growth  in  its  municipal  insti¬ 
tutions. 

Here  we  have  a  basis  of  classification  and  taxation 


24 


which  bears  as  direct  a  relation  to  the  needs  of  the  taxing 
authority  as  may  be,  for  the  taxing  authority  continually 
tends  to  identify  itself  with  the  most  prominent  interests  of 
the  social  community,  as  asserted  by  its  organized  govern¬ 
ment.  The  social  community,  in  its  most  general  sense, 
will  be  found  to  create  the  limit  within  which  it  is  equitable 
and  productive  of  improvement  to  tax  unimproved  land. 
This  limit  may  not,  and  in  many  cases  cannot,  be  that  of 
the  social  community  itself;  but  so  far  as  it  will  be  neces¬ 
sary  to  depart  from  such  a  theory  of  it,  we  will  find  that 
the  social  community  has  the  power  to  fix  and  to  enforce 
more  special  classification  within  itself. 

To  apply  these  general  statements  to  the  conditions  of 
taxation  in  a  large  city, insisting  in  general  on  the  principle 
that  an  unimproved  lot  shall  be  taxed  as  highly  as  an  im¬ 
proved  lot  of  the  same  size  and  like  location,  the  first  class 
of  taxable  land  should  constitute  the  land  fronting  upon 
the  principal  thoroughfare,  within  those  blocks  most  de¬ 
sirable  for  business  purposes  or  fashionable  residence. 
There  could  be  as  many  such  classes  as  circumstances  might 
demand.  There  would  be  decidedly  fewer — there  could  not 
possibly  be  more — complaints  of  discrimination  or  favorit¬ 
ism  on  the  part  of  the  assessors  or  the  boards  of  revision 
than  there  are  under  the  valuation  system.  To  define  what 
fronts  upon  a  principal  street  and  what  blocks,  bounded 
by  other  streets,  should  constitute  the  various  classes  for 
purposes  of  taxation  would  be  as  easy  a  matter  of  public 
enactment  as  the  fixing  of  the  boundaries  of  a  ward  or  pre¬ 
cinct  for  electoral  or  police  purposes,  and  the  publicity  of 
the  definition  would  afford  the  owner  of  the  property  taxed 
highest  the  compensation  of  a  proof  of  his  right  to  charge 
the  high  rents  which  tradesmen  are  willing  to  pay  for  a  lo¬ 
cation  on  the  best  streets.  The  tradesman  pays  higher 
rents  for  the  landlord’s  higher  taxes  now  ;  but  under  the 
operation  of  specific  taxation  law  he  would  be  protected 
against  landlords  who  make  higher  taxes  an  excuse  for  ex- 


25 


orbitant  rents  ;  since  he  could  easily  find  out  in  what  class 
the  property  was  taxed,  the  specific  rate  assessed  upon  it, 
and  how  far  his  landlord  was  justified  in  raising  rents  on 
this  account.  The  facilities  for  concealment  afforded  by 
the  necessity  of  assessing  every  property  separately  operate 
in  favor  of  the  landlord,  and  place  the  tenant  more  in  his 
power  than  the  latter  would  otherwise  be.  This  considera¬ 
tion  alone  is  an  important  argument  in  favor  of  specific 
taxation,  and  a  reason  why  those  who  do  not  care  .to  own 
property,  but  are  willing  to  rent  it,  should  support  such  a 
reform. 

The  just  limits  of  such  classification  would  easily  define 
themselves.  Provision  could  be  made  for  appeals  as  easily 
as  now,  and  the  appeal  should  be  announced  in  as  public 
a  manner  as  the  original  definition,  so  that  no  change  could 
be  auth  rized  without  good  reason.  The  publicity  incident 
to  the  whole  machinery  of  specific  taxation  would  in  itself 
be  a  feature  of  incalculable  value  as  a  prevention  of  dis¬ 
honesty,  injustice  or  evasion. 

County  authorities  could  in  like  manner  be  authorized 
to  classify  rural  property  for  taxation  ;  wild  and  barren 
land  constituting  one  class,  on  which  the  tax  per  acre 
could  be  adjusted  so  as  to  induce  the  owner  to  investi¬ 
gate  the  possibilities  of  improvement,  and  if  their  realiza¬ 
tion  were  found  to  be  beyond  his  individual  power,  the 
forfeiture  of  the  land  for  nonpayment  of  taxes  would  injure 
no  one.  The  owner  would  be  rather  benefited,  and  the 
public  authorities  would  be  free  to  sell  the  land  to  any 
buyer  who  thought  he  could  make  use  of  it. 

Arable  or  cleared  land  should  constitute  at  least  one 
class,  and  timber  land  another,  the  latter  to  be  taxed  lower 
because  of  the  increasing  necessity  of  forest  preservation. 
Plain  common  business  sense  in  the  exercise  of  the  power 
of  classification  would  be  the  best  guarantee  against  op¬ 
pression  or  discrimination.  The  fact  that  the  area  of  every 
nd  owner’s  property  is  already  a  matter  of  record  upon 


26 


county  deed  books,  or  may  be  easily  computed  therefrom, 
would  facilitate  area  taxation  and  it  would  be  an  easy  mat¬ 
ter  after  the  completion  of  preliminary  surveys  with  a  view 

to  classification,  to  require  that  deeds  should  contain  the 

» 

respective  areas  included  in  each  class,  when  more  than  one 
class  was  represented  in  a  single  piece  of  property. 

The  third  question  to  be  answered  is,  whether  taxation 
according  to  such  a  plan  would  be  just  or  equitable.  Would 
its  burdens  be  distributed  in  proportion  to  the  actual  ob¬ 
ligations  of  the  taxpayers  to  the  community. 

It  is  only  fair  that  a  man  who  holds  more  land  than 
he  can  use  should  be  subjected  to  some  limiting  influence, 
for,  as  we  have  seen,  land  is  of  increasing  importance  to 
the  welfare  of  the  whole  people. 

On  the  other  hand,  it  is  only  fair  that  a  general  ar¬ 
rangement  should  be  made  under  which  a  man  who  could 
use  a  large  area  should  be  at  liberty  to  do  so.  To  let  him 
use  as  much  land  as  he  wants  so  long  as  he  recognizes  the 
public  right  in  the  matter  by  paying  the  tax  in  proportion 
to  the  actual  amount  used,  is  more  in  accordance  with 
democratic  principles  than  it  would  be  to  fix  an  arbitrary 
limit  to  the  area  which  a  single  owner  could  own  ;  nor  could 
it  be  so  readily  evaded  as  the  latter  species  of  provision, 
under  which  a  man  could  transfer  tracts  of  land  to  his 
relations  and  thus  escape  the  penalty.  If  the  land  were 
evenly  taxed,  it  would  make  no  difference  who  owned  it. 

To  see  that  an  area  tax  would  be  far  more  just  than  a 
value  tax,  let  us  assume  that  there  are  half  a  dozen  proper¬ 
ties,  of  the  respective  areas  of  ten,  twenty,  forty,  eighty, 
one  hundred  and  sixty  and  three  hundred  and  twenty  acres, 
and  that  the  artificial  improvements  are  of  equal  value 
throughout,  consisting,  say,  of  houses  worth  $5,000  upon 
each  property.  Let  us  suppose  that  the  land,  without  the 
houses,  is  worth  $100  per  acre.  The  following  table  shows 
the  total  value  of  each  property  : 


27 


Property 

2 

3 

4 

5 

6 

Acres 

IO 

20 

40 

80 

-  1 60 

320 

Value 

|  $6000  | 

7000 

9000 

13000 

21000 

37000 

It  is  evident  from  this  table  that  the  taxation  of  real 
property  on  the  ad  valorem  plan  is  less  burdensome  per  acre 
as  the  area  of  a  holding  increases.  If  we  decide  to  exempt 
artificial  improvements  and  attempt,  like  Henry  George, 
to  tax  the  land  itself,  the  ad  valorem  tax  puts  a  premium 
on  monopoly  and  discourages  small  holdings  for  homestead 
purposes.  It  is  not  to  be  wondered  at  that  Mr.  George 
suspects  the  existence  of  conditions  which  make  the 
rich  richer  and  the  poor  poorer.  The  only  thing  to  be 
wondered  at  is  that  he  fails  to  see  that  it  is  the  taxation  of 
that  element  of  value  which  the  individual  creates,  the  im¬ 
provements  both  in  the  soil  and  on  it,  that  tends  to  keep 
poverty  abreast  of  progress.  But,  just  as  a  man  on  a 
giant’s  shoulders  can  see  farther  than  the  giant  can,  we  can 
see  that  his  principle  that  taxation  should  not  handicap  im¬ 
provement  extends  farther  than  he  thinks,  and  that  it 
applies  to  land  as  well  as  to  hbuses.  The  logical  result  of 
its  extension  to  land  is  the  principle  of  specific  taxation; 
the  taxation  of  land,  not  the  individual. 

The  above  table  shows  again  that  the  ad  valorem 
method  of  taxation  discriminates  in  favor  of  the  land 
miser,  who  locks  up  large  areas  for  speculative  purposes  and 
keeps  them  idle  and  unproductive,  while  it  bears  hardest  on 
the  small  holder  who  perhaps  cultivates  every  square  foot 
of  his  little  lot  not  required  for  his  houses  and  pathways. 
The  lot  holder  who  improves  his  property  is  punished,  as  if 
for  doing  wrong  to  the  community,  when  he  increases  its 
supply  of  building  accommodation  and  does  his  share  to 
keep  rents  down.  The  farmer  is  punished  by  increased 
taxation  if  he  increases  the  value  of  his  farm  by  making  it 
more  productive,  increasing  the  supply  of  food  and  keeping 
down  the  price  of  the  necessaries  of  life. 


In  short,  as  a  scheme  for  taxing  all  the  necessaries  of 
life,  the  ad  valorem  system  of  land  taxation  is  a  phenomenal 
success. 

“  But,”  it  is  objected,  “  is  it  just  to  confiscate  a  man’s 
property  because  he  is  unable  to  improve  it  or  to  pay  the 
taxes  on  it  ?  ”  It  is  certainly  just  if  the  good  of  the  com¬ 
munity  requires  it.  The  good  of  the  community  justifies  a 
railroad  company  in  taking  a  man’s  land  for  its  tracks, 
unless  he  incorporates  another  railroad  company  and 
builds  tracks  on  his  land  himself,  and  even  then  the  other 
company  may  take  his  house  itself  or  any  other  part  of  his 
property  it  wants,  in  order  to  secure  a  right  of  way. 
Neither  form  of  confiscation  robs  him,  so  long  as  fhere  is 
provision  for  the  payment  of  a  fair  award  of  damages. 
He  is  in  most  cases  compensated,  both  directly  and 
indirectly.  The  railroad  improves  the  value  of  his 
adjacent  property  and  so  will  the  other  form  of  confiscation 
in  the  public  interest.  He  can  get  a  better  price  if  he 
sells  and  a  higher  rent  if  he  continues  to  own  land  in  the 
vicinity.  The  development  of  the  community  improves 
the  market  for  everything  that  he  produces  or  handles.  If 
a  corporation  can  confiscate  useful  land  to  make  it  more 
useful,  the  people  can  surely  confiscate  useless  land  to  make 
it  useful. 

A  member  of  the  Pennsylvania  Legislature,  after 
hearing  argument  upon  a  proposed  amendment  to  the 
Constitution  of  the  State,  providing  for  the  specific  or  area 
taxation  of  land,  objected  that  such  a  change  would  make 
the  rich  richer  and  the  poor  poorer.  This  objection  is 
worth  examination. 

Let  us  suppose  two  large  farms,  side  by  side,  both 
under  partial  cultivation  only.  The  owner  of  one  is  rich, 
the  owner  of  the  other  is  “  land  poor.”  On  the  introduc¬ 
tion  of  area  taxation,  the  rich  farmer  would  pay  his  taxes, 
but  he  would  cultivate  his  whole  farm  so  as  to  make  every 
acre  pay  its  share.  Thus  the  objection  might  be  partly 


29 


true ;  the  rich  might  possibly  become  richer.  It  is  a 
question,  however,  whether  he  would  not  find  that  he  could 
do  more  and  increase  his  wealth  faster  by  reducing  his 
area,  and  so  sell  a  part.  In  either  event,  the  increased 
production  of  that  farm  would  increase  the  supply  of  food 
or  raw  material  in  the  public  market.  The  poor  could  buy 
provisions  so  much  cheaper,  and  the  manufacturers  who 
employed  them  could  buy  raw  material  cheaper  and  hence 
pay  better  wages  or  employ  more  of  the  aforesaid  poor. 
This  is  certainly  not  making  the  poor  poorer. 

Now  let  us  see  what  would  happen  to  the  other  farmer 
— the  land-poor  man.  He  could  not  pay  the  taxes  on  all 
his  unproductive  land,  so  he  would  figure  up  how  much  he 
could  use  and  make  pay  its  own  taxes  and  then  he  would 
sell  the  rest.  For  it  he  would  receive  money,  which  he 
could  either  put  into  fertilizers,  better  buildings,  machin¬ 
ery,  live  stock  or  miscellaneous  investments  without  ne¬ 
cessarily  rendering  himself  liable  to  increased  taxation 
thereby.  If  he  used  the  purchase-money  wisely,  he  would 
be  richer,  not  poorer,  as  a  result  of  the  “  confiscation  ”  of 
part  of  his  land.  Meanwhile  the  purchaser  of  the  sold  land 
would  probably  improve  it,  thus  at  any  rate  raising  the 
average  value  of  land  in  the  neighborhood  and  possibly 
increasing  the  population  so  as  to  enlarge  the  market 
for  farm  products.  Both  buyer  and  seller  ought  to  be 
benefited. 

It  is  not  easy  to  see  where  the  influence  that  would 
make  the  poor  poorer  would  come  in.  The  poor  in 
general  would  be  benefited  by  the  fact  that  more  land 
came  into  the  market  for  sale  and  a  house  was  easier  to 
get. 

So  far  as  “  confiscation  ”  by  this  indirect  method 
becomes  necessary,  so  far  would  the  supply  of  capital 
available  for  building  and  industrial  enterprises  be  in¬ 
creased,  for  the  money  that  was  taken  out  of  land  would 
seek  other  channels  of  investment.  Houses  in  which  the 


3° 


poor  could  live  and  factories  where  they  could  be 
employed  would  be  multiplied,  for  small  houses  pay  a 
bigger  interest  than  most  other  forms  of  investment ;  and 
the  increased  development  of  the  soil  would  result  in  the 
discovery  of  increased  quantities  and  varieties  of  raw 
material.  Thus  area  taxation  would  be  likely  to  preserve 
and  promote  the  tendency  of  population  to  flow  from  the 
country  to  the  cities,  by  diversifying  industries.  This 
tendency  is  of  the  utmost  importance,  for  upon  its  main¬ 
tenance  depends  the  adequacy  of  a  constant  soil  to  the 
support  of  an  increasing  population.  A  ^eduction  of  the 
average  area  required  for  each  person  may  be  a 
necessity  of  the  future  and  this  reduction  is  going  on  all 
the  time  if  the  population  in  cities  and  towns,  requiring 
building  lots  only,  increases  faster  than  that  which 
occupies  land  for  cultivation. 

The  experience  of  France  has  shown  that  small  farms 
prove  so  profitable  to  the  farmers  as  a  whole  that  they  are 
continually  tempted  to  buy  more  land,  not  knowing  what 
else  to  do  with  their  money.  Distributive  influences  there¬ 
fore  should  be  permanent  and  self-acting.  With  the 
growth  of  the  community  and  the  consequent  increase  in 
the  demand  for  revenue  to  pay  the  expenses  of  administra¬ 
tion,  the  taxation  on  a  given  area  tends  to  increase.  If  it 
increases  faster  than  the  whole  demand  for  land,  further 
sub-division  is  promoted.  If  it  increases  more  slowly, 
production  is  relieved  to  that  extent.  But  it  should 
increase  at  about  the  same  rate,  for  both  increases  are 
the  effects  of  the  same  cause  :  the  increase  of  population 
and  the  general  prosperity  and  development  of  the 
community. 

As  an  example  of  how  the  specific  method  of  taxation 
would  work,  let  us  examine  the  conditions  of  taxation  in 
Lancaster  County,  Pennsylvania — the  richest  agricultural 
county  in  the  United  States — with  the  unusually  low  county 
tax  rate  of  two  and  a  half  mills  on  the  dollar.  The  assessed 


value  of  real  property  in  the  year  1885,  exclusive  of  the 
City  of  Lancaster  and  t'he  Borough  of  Columbia,  was  about 
$70,000,000,  and  therefore  produced  a  nominal  revenue  of 
$175,000.  The  area  of  improved  land  in  the  county 
(including  Lancaster  and  Columbia)  at  the  time  of  the 
census  enumeration  in  1880,  was  490,922  acre's,  or  a  total 
area  of  970  square  miles,  or  621,000  acres.  Thus  the 
amount  raised  by  taxing  all  rural  property  ad  valorem 
in  1885,  could  have  been  raised  by  a  specific  tax  of  35.6 
cents  to  the  acre  of  improved  land,  or  an  average  tax  of 
28  2  cents  to  the  acre.  The  average  area  of  a  Lancaster 
County  farm  is  54  acres;  the  average  value  of  farmland, 
including  all  improvements,  $100  per  acre:  so  that  the  ad 
valorem  tax,  at  two  and  a  half  mills  on  the  dollar,  would 
be  one-fourth  of  one  per  cent,  of  $5,400  ;  that  is,  $13.50  as 
the  annual  tax  bill,  or  25  cents  per  acre.  It  may  be 
provisionally  estimated,  therefore,  that  in  Lancaster  County 
the  effect  of  substituting  specific  for  ad  valorem  taxation 
would  be  to  increase  the  actual  taxation  according  to  the 
improved  area  10.6  cents  per  acre,  or  42.4  per  cent.  So 
far  as  this  would  operate  to  effect  a  reduction  in  the 
average  farm  area,  it  would  reduce  it  from  fifty-four  acres 
to  thirty-seven  acres  and  a  half  ;  37.6  acres,  taxed  at  35.6 
cents  an  acre,  paying  the  same  tax  that  a  farm  of  54  acres 
pays  now.  But  there  are  130,000  acres  of  unimproved 
land.  Let  us  suppose  that  30,000  of  this  is  capable  of 
immediate  improvement  and  should  be  taxed  at  35.6  cents 
an  acre.  If  it  were  all  collected,  $10,680  would  be 
obtained  and  the  tax  rate  on  improved  land  would  come 
down  9.4  per  cent.  If  the  100,000  acres  of  unimproved 
land  not  yet  considered  were  taxed  five  cents  an  acre,  to 
begin  with,  $5,000  more  would  be  produced  and 
the  tax  rate  on  land  would  come  down  nearly  five  percent, 
more  The  policy  of  taxing  unimproved  lands  more 
heavily  and  thus  relieving  improved  land,  while  stimulating 
the  unimproved  to  improvement,  would  of  course  have  to 
be  adopted  gradually  ;  but  its  benefits  would  be  likely  to 


32 


v 

\ 


vindicate  it  from  the  start.  Doubtless  there  is  much 
unimproved  land  in  Lancaster  County  for  instance,  which 
would  be  taken  up  and  improved  at  once  if  sold  for  taxes. 

The  conditions  of  improvement  vary  with  the  growth 
of  a  community,  and  thus  while  it  would  be  unjust  to  begin 
the  taxation  of  unimproved  land  in  a  rural  community  by 
taxing  it  as  heavily  as  the  improved  land  nearest  to  it.  tor 
the  reason  that  the  former  may  be  only  remotely  capable  of 
improvement,  development  creates  a  presumption  in  favor 
of  capacity  and  this  capacity  is  more  unifoi  m  as  develop¬ 
ment  progresses.  It  becomes  virtually  uniform  when  the 
form  of  improvement  suggested  by  circum>tances  is  building 
and  not  cultivation  ;  and  thus,  while  a  sliding  scale  of  dis¬ 
crimination  between  improved  and  unimproved  land  is 
possible  in  the  country,  there  should  be  no  discrimination 
at  all  within  any  class  of  city  property  The  anti- 
discrimination  principle  should  be  applied  throughout,  the 
modifications  required  in  undeveloped  rural  regions  being 
introduced  through  classification  on  a  basis  of  natural 
characteristics.  Wild  or  mountain  land,  swamp  land,  timber 
land  and  cleared  or  arable  land  all  suggest  themselves  as 
easily  determined  forms  of  classification. 

As  we  advance  from  the  country  to  the  city,  we  find 
that  under  the  ad  valorem  system  the  value  of  the  ground 
is  taxed  more  and  more  compared  with  that  of  the  building 
on  it,  until  we  reach  a  point  at  which  a  property  consisting 
of  a  frame  shanty  and  a  lot  of  25x100  feet,  which 
in  the  country  was  taxed  entirely  on  the  value  of  the 
shanty,  would  be  taxed  entirely  on  the  value  of  the  ground. 
City  taxation  of  realty  thus,  tends  to  become  ultimately 
taxation  of  the  land  alone.  To  repeal  the  common  law 
that  improvements  should  be  taxed  would  secure  a  more 
harmonious  and  pleasing,  as  well  as  a  more  useful 
development  of  outlying  streets  and  suburban  avenues. 
Commodious  houses  would  be  more  readily  built  by  large 
capitalists  and  thus  rents  would  be  lowered  for  the  wage 
workers  in  centres  of  population.  A  simple  provision, 
like  that  abolishing  irredeemable  ground  rents  in  Penn¬ 
sylvania,  could  be  enacted,  requiring  a  landlord  to  sell  to 
a  tenant  the  house  o<  cupied  by  the  latter  at  a  price  not 
exceeding  the  capitalization  of  the  rent  at  a  fixed  rate  of 
interest.  This  would  do  much  to  keep  capital  in  circulation 
in  the  community  and  to  secure  a  supply  of  houses  equal 
to  the  demand. 


